Name: The British Industrial Competitiveness Scheme (BICS): What Manufacturers Need to Know
Uploaded: 2026-10-21T08:46:12.033Z
Duration: 34 min 32 s
Description: The British Industrial Competitiveness Scheme (BICS): What Manufacturers Need to Know

Transcript for "The British Industrial Competitiveness Scheme (BICS): What Manufacturers Need to Know": Good morning. If you're coming online, we're just going to give people a minute to join us, and then we'll we'll start officially. So, just give people a chance to sign up. Okay. Good morning, everyone, and welcome to the, made in Sheffield, event, in collaboration with Sheffield Chamber of Commerce and Industry, Business Sheffield as part of Sheffield City Council, and the company of, Cutlers. And, if you don't know me, I'm a director of Made in Sheffield, and we, manage quality licenses for manufacturers, in the Sheffield region. And this is the first in, hopefully, a series of additional benefits for Made in Sheffield's license holders and manufacturers, that we want to, share with you. And I'd like to really say thank you to Sarah and the team at Leyton, for, facilitating this and, giving you the opportunity to benefit from their expertise. And I'm just gonna hand over really to Dean and Dan who are going to run the session, and then we've got some q and a. And, please use the q and a, chat session as well as we go through, and hopefully, we'll all benefit from their knowledge. Thank you very much. Thank you very much, Tracy. Good morning. Hello, everybody. Yeah. As Tracy said, we will be today covering, the the BICS exemption, what you need to know, what's going on, what it does, and and how you, how you guys can can get started with things. Just by way of introduction, my name is Dan. Obviously, I'm over here at LATAM. I'm a business development manager over here, covering various different energy incentives and other government backed schemes as well. I've got my colleague today on the call, Dan, who is our UK energy lead. And there is not much that he doesn't know about Bex, so who will be best placed to, to support you with with any questions? In terms of the the call today, we'll be understanding why we're talking about Bex, what it is, who can qualify, talk about some of the challenges, and then at the end, there'll be a q and a session as well. As we go throughout the call, if there are any questions that come up, spring to your mind, just pop them in the chat. If we see them, we'll answer them there and then for you, or, alternatively, at the end, we will loop back around, and make sure we cover all of that for you. Next slide, please, Sarah. So just quickly, in terms of Leyton, who we are, Leyton, we are a global tax consultancy. So we operate across, a range of, areas. Anything government incentives and to do with tax is where we sit. There are a number of different energy incentives, but we also cover areas such as r and d tax credits, patent box, you name it. That's where we sort of sit. Across the energy schemes, there's obviously BICS, but there's obviously CCL as well, which I'm sure many of you will be be claiming along with EII and a couple of other more niche, incentives as well. Cool. So let's let's go into Bix. Dan, why are we talking about Bix? Essentially, we're talk... We're talking about BECCS because it's the new the new shiny thing that the government's brought out to help UK manufacturers. You know, they they realize that the energy costs are quite a a burden for manufacturing in The UK. You know, if you look at the news, you've watched multiple businesses, it seems, close on a daily basis at the moment. And a lot of those manufacturers are, you know, citing the the the cost of running a company in in The United Kingdom. So it... It's it's something that they've been working on for a wee while, and I can get into that in a in a bit and how it works all. But, essentially, you know, energy costs in The UK are exorbitant compared to pretty much the whole of the world. A lot of lots to do with the taxes and levies we impose on our energy supplies. And, you know, with the increased sort of pressures from, you know, things happening in Ukraine, Iran, etcetera, and, you know, the non commodity costs going up and up, you know, everyone's bills are basically climbing. And so, you know, we wanted to just make sure everybody's aware of BECCS. It's been out, you know, in the public domain now for quite a while. You know, we've seen a lot of stuff online. We've seen even, you know, stuff in the, you know, more sort of mainstream news, etcetera, etcetera, around that. You know? So this is one of the schemes the government have actually been shouting about. Whereas the other incentives, some of those you rammed off, Dan, essentially, they they never really promoted them, and that was a big part of, I think, why a lot of businesses didn't realize they existed. So hopefully everyone's aware. Well, you'll definitely be aware after today's call what Bex is and how it works. But, you know, really, that's why we're wanting to talk to everyone because if you can take advantage of it, it's really worth it. Brilliant. Yeah. Thanks, Dean. Next slide, please, sir. Okay. So let's get let's let's get into it. Let's give us an overview of Bix, Dean. In in simple form, what is it and how does it work? Yeah. So I'll I'll do a bit of sort of history around it. So it all started with the government's modern industrial strategy, not launched last summer, so summer twenty five. And what the government done at that point is they basically picked certain segments of The UK economy that they deemed there had good growth potential. So quite lofty titles, things like advanced manufacturing, defense, clean technologies, etcetera. And they brought out a number of different measures that supported businesses within that sort of arena. But they also had this BECCS incentive, our British industrial competitiveness scheme for the the full name. BECCS is easier to say. They have the BECCS incentive there to support businesses with one of their main challenges, and that was energy costs. And what what BECCS really is is essentially it's an exemption from three taxes that are imposed on your electricity supply. So if you were to look at a... An electricity invoice, if it's an itemized one, you might see renewable obligation, feed in tariff, and capacity market charges on your bill. And, essentially, what they've said is if you're doing the right manufacturing and you can demonstrate that you consume enough of your energy in that manufacturing, then, essentially, we will exempt you from those three taxes at different sort of levels. So it's all around, you know, not just being in the right sector. It's also about a a list of sort of eligible products that the government put out. And it's a substantial list. There's literally thousands of of of, products that they're saying if you do this or you consume energy manufacturing this, then you can take advantage of this incentive. And what what we need to try and decipher or help a business decipher is, you know, look at their production, determine, you know, how much of that production goes towards the eligible manufacturing, and then, essentially, how do we then demonstrate that to BEST? So it's run by BEST. They were DBT. It's now BEST. That's department for business innovation science and technology. So it's administered by BEST. They do a lot of the other incentives to be to be fair. And we need to demonstrate to them that we've, you know, basically determined the fair and reasonable approach to to showing that they're a big consumer of electricity in the manufacture of these products. So it's, you know, it's it's a good incentive. If we look at what the what the sort of benefit is here, what's the the price that we're looking to get, if you were to get a a 100% exemption from those three taxes, if we add them together, it's roughly about 4p per unit of energy. So if we say the average price of energy here is about 20p, you're looking at about a 20% discount if you can get the full rate of relief. And, you know, a lot of businesses, the the the way that the relief has been distributed is they've tried to simplify it. Essentially, what they've done is they've said you either get zero rate of relief, 50% rate of relief, or a full 100% of rate... Rate of relief. And that's determined by what percentage of your electricity's consumed manufacturing eligible products. So it's almost like a gated approach. So if if you're consuming less than 25% of your electricity on eligible manufacturing, then, unfortunately, you don't get anything. If it's between 2550% of your electricity on eligible manufacturing, then you get a blanket 50% exemption from the taxes. And if we can demonstrate that it's actually over 50% of our energy on eligible manufacturing, then that site will get a blanket 100% exemption. So it can be it can be quite good. If we look at it, compared to other incentives that are available, it sort of slots in as the second most lucrative. So the most lucrative one is something called the EII exemption. It's for similar sectors, but not all. So it's more of the heavy industries, I would say. And what they've, done with that is, basically, it's quite a hard, test to pass an intensity test. So only in The UK, there's only about 550 companies with the EII exemption. Whereas for BECCS, they've said it'll be open to up to 10,000 companies. Brilliant. So... Who's who's it targeted towards, Dean, as. well? So if if we dig into, I suppose, those sort of lofty segments that I was talking about of industry, you know, so if we look at the the advanced manufacturing, who's been covered under there? It's aerospace, automotive, you know, defenses in there. So defense really hasn't had anything in the past. Pharmaceuticals is in there. They've never had anything in the past either. So the automotive and and the, sort of aerospace, they've been able to take advantage of a few things before, whereas pharma's never really had anything. Then we've got things like clean technology. So they want to incentivize, obviously, the transition to cleaner tech. And what that means is basically the businesses that we see, at, you know, the various ports around The UK that are manufacturing things like wind turbines or people who are making things like hydrogen, electrolysis machines, etcetera, to generate hydrogen. Those sorts of businesses are now able to take advantage, which, again, they never were able to before. And if we think about all the other incentives, which were more for the heavy industry, so that was your, you know, your metals, your chemicals, your glass, etcetera. This is very much aimed at more of the the end user. So if you... I always use the example of, like, Jaguar Land Rover, say. So JLR are obviously in that automotive space, but the government realizes they need to support the full supply chain. So it starts right at the beginning. It starts with the person that makes the aluminum ingot that then gets sent to the person who cast that and get into a park for the car or the person who makes all of the plastic bits that go into the end of the car or the glass right the way up until, you know, a finished car goes out of JLR's JLR's factory. So they've they've taken those sort of industries. So think about aerospace as well. Right from the start, everything that goes into making that plan right up till, you know, a finished article. And they've also included for the first time ever service businesses. So, I mean, a lot of the associations when this was going through consultation, a lot of the associations were saying, well, you've missed out a a large portion of our membership even though we're in the right sphere by not allowing service businesses to take part. So right at the end of the second consultation when we're expecting guidance to come out, they had added a few extra sector codes so that these business could take it... Take advantage. So that was things like, you know, companies that manipulate metals, forging, pressing, stamping, those sorts of companies, and also coating of metal. And that's what captured, you know, quite a big, big segment of of of those sort of sectors that weren't being covered initially. And that's where we've actually seen a massive uptick in in people finally being able to take advantage of something and, you know, it's there for them. The only difference is you can't apply a a sort of product code or commodity code to your service. You you have to use the the codes for the... Basically, the item you applied the service to. So the way I think about it is if you were to quote quote something and then you had to ship it abroad, you wouldn't ship it under quoted item. You'd ship it under part for car that you've quoted, etcetera etcetera. Brilliant. So I think that's, that sort of covered everyone, you know, who can qualify there. I think it'd be interesting to to move on and dig into the, I guess, criteria as well. Well, no. I suppose there's there's a few wee things I should probably tick off, actually. You know, they've they've come out with a minimum requirement. So the the qualification is is looked at on a site by site basis. So if you've a legal entity with several sites, well, every site is assessed individually. There's a couple of criteria. The first is, they must have a a minimum of 33,000 units of electric annually or consume a minimum of 33,000 units of electric annually. That's a pretty low bar, that they've set. I think my house uses something like seven, you know, so I'd expect a lot of business to use more than that. And you also must be, you know, a a, like, a limited entity that's registered on Companies House. So if there's nothing on Companies House because of the way they've set up the, application portal and also the sort of assessment offer, And it... It's basically trying to automate a lot of that, and what that system wants to do is it wants to look up your details and company's house to verify. So if if you're not on company's house for whatever reason, then, unfortunately, you just can't take advantage. Maybe something could change in that arena in the future. And then it's just about, you know, I guess, demonstrating how much energy consume in the manufacturer for those eligible products, and, you know, there's quite a a burden of evidence that you need to provide. You know, one of the key things we've watched over the years is every year with all of the incentives almost, every year, they add additional sort of requirements to the guidance of how to get the scheme or, you know, how you need to apply and what evidence you need to, you know, provide. And BECCS has been, I would say, probably the the the one with the heaviest burden, you know, being the latest one. And we've watched, I think, them take some of what they want BECCS to look like and apply it to the other incentives that are that are currently available. Okay. And when you say in the the the evidence, what sort of things are we talking here? What are companies going to have to provide, in order for for an application to to be successful? Yeah. So the the key is that, essentially, they want to assess a six month window of your production. So applications actually opened on the October 1, and they close on the November 30. So we've actually got a short window to apply. And what they really want to see is the the latest six months of data. So a six month window, so say we just looked at March to August. In March to August, they wanna see all of your energy consumption. And, again, this is for every site. They want to then see all of your production or your... Basically, your your output over that six month period. And what they've... Went and said is essentially they will not accept sort of sales records or the sales ledger as, evidence of production. So what we're really looking for is, you know, if you have an ERP system, we're looking for, you know, production logs from that that demonstrate, you know, work started, work finished in that in that period. We're looking for things like quality control records to show, you know, something was made and signed off in that period. And then, you know, again, this is a stumbling block that we've seen a lot of businesses come up against, which is essentially... They they typically maybe aren't tracking things in that way. And they've also been asking for additional things like, you know, floor plans and, you know, you know, can you ring fence the part of the plant that manufactures the eligible products and the noneligible products, etcetera, etcetera. Again, some businesses don't have that, but we've been working with a lot of our clients just to get around and get some photos of of the stuff that's there. And, you know, I guess the other stuff is, you know, the sort of higher level stuff of, you know, a bit of a blurb about the company, what they do, what raw materials they bring in, what processes those materials go through to get to the finished product, and then what are those finished products. But the the heaviest burden here is the production data. And that's where, again, a lot of businesses thought, you know what? I've been tracking this for years. You know, a sale comes in. That's the order book essentially, and, you know, somebody goes and and and, fixes that. So, we've had to try and come up sometimes with a lot... With our clients around the methodology of how we can marry up what they have with what the government are looking for to demonstrate that production, and that's them being the tricky part so far. Yeah. You you you you... I think you you touched on it there. My next my next question to yourself was gonna be what are some of the challenges that you've seen? Obviously, the application window's now been live. Is it purely that that that gathering of the evidence that's been been the biggest challenge for for clients, or are there other sticking points? There's some there's some other wee bits in there. You know, the production data is the hardest one, and and that's just down to what data do do do the... Does the business have and how do they track things. You know? Because the the the problem we have with Bex at the minute is it's almost, you know, one... You get one go at applying. Once you hit submit, and they've said this, you know, quite strongly, once you hit submit on your application on the online portal, you don't have any recourse to come back and demand anything. So what what you're trying to do is obviously put together the best submission package possible, making sure that it's then submitted in time, etcetera, so that when you're gonna hit and submit, it's, you know, it's locked in. It's secure. But, yeah, that's probably the trickiest bit. There's a wee there's a wee bit around, you know, things like getting the... You know, for example, they want to have a a person from company's house. So one of the directors listed on company's house has to approve the submission. So when they log in to the portal, you know, for us, we're acting as a third party. So they need to approve us as a third party, but also they need to be approving the submission as when it's sent. And, sometimes a big business, it's hard to hard to speak to, you know, those those individuals because it... You know, the energy is looked after or this project would be looked after, you know, with somebody within a procurement team, for example, that maybe doesn't typically have access to the the sort of senior directors in the company. So we've had a bit of that. Yeah. And then, you know, challenges more for... From our perspective were right up until even the day that the portal opened, they were adding requirements to the to the list of data that you must provide. And so we had started a good bit of work on it preemptively saying, right, get all of this data together. Let's try and move things fast. And then right at the end... Or right at the open even, they decided, alright. We'll throw in a few few extra things that you just need to go and find out now. And so that was quite frustrating. The the challenge a challenge maybe not around just the simply BECCS application, but BECCS overall and these incentives overall is that the team within BECCS, typically, we've seen them quite understaffed. So I'll give you an example. In in the, in the EII exemption, there's only 550 companies every year, and we watch that team essentially fumble a lot of the applications or reapplications on an annual basis. That's only 550. It's the same team that's going to administer 10,000 BECs. So, it's great that they're they're doing it. They've got a short window for us to apply. They've then got a a short window from when this kicks off because the exemption actually kicks in on the April 1. That's when the savings will start. And, you know, we just feel that 10,000 applications being assessed before the April 1 might be a bit of a stretch just based on experience. So that's why we're just trying to get everything in as soon as possible so we're maybe at the top of that pile. Makes a lot of sense. So just to confirm, Dan, in terms of time lines, so you mentioned the the application window opened on October 1 and closes on November 30, and then it's going live from 04/01/2027. Is that correct? Yes. That's that. Yeah. So, yeah, the timeline will be you apply, before the end of November. The government then need to assess your application and approve it. Once it's approved, they will generate, basically, an exemption certificate, and that certificate will list all of the meters or impounds within your business that have the exemption at the applicable rate. That then goes off to your supplier, and your supplier then has to make sure that they have exempted you from those taxes as of the April 1. So that's when it all kicks off. The other important piece here is for this year and this year alone, the government will backdate it to April 26. So you will get a rebate as if you had that exemption on April 26. So April 27 rolls around, your bills come down, but also soon after that, hopefully soon after that, your supplier will also issue a one year rebate and add that to your energy account. Amazing. So this first year's scheme or the first year of this scheme, basically... It's basically worth twice as much as every other year following it. And it's approved till 2035, so it's actually long term support that that they're offering as long as you maintain it. You know, there's a bit of admin annually to maintain it, but as long as you maintain it, this should continue right through till 2035 for you. Brilliant. You just mentioned that the the yearly admin. What sort of things are are are required? Well, again, we don't know, because we've never done any yet. But if we look at the other incentives, this is very similar to the EII exemption. If not, you know, it's sort of the the little brother of it. And the annual debt... An annual, declaration basically goes over what you consumed in the last twelve months, the products you, you know, produced. And, basically, it's a... It's almost like a a smaller, softer sort of reapplication. But what they're not telling you is you're not eligible until you do that. Your eligibility is locked in for five years. So once you're approved, you're locked in. We just need you to do an annual declaration so that you can get your following year certificate. So you'll need to get a new certificate every year. That goes off to your supplier. Okay. That that all makes sense. A question that, I've been asked, since this has gone live, is around businesses that are in a, in in a space which is owned by a landlord. Can they still claim BICS, or how does that work? Yes. You can definitely still claim Bexus if you're under a landlord supply or a third party supply. The trick will be basically the relationship with said landlord. That's where we've seen issues on other schemes is the relationship. So what I I would be saying is if you are in a landlord scenario, basically, speak with the landlord and explain to them, look. I'm eligible to claim Bex, but you control the the energy account. Can we talk about basically how my bill can come down once you pass it on, and have that conversation as soon as possible? Because, again, we've we've had businesses that can get some of the other incentives that, unfortunately, that relationship isn't there, and that's been the thing that's held them back. However, this scheme, definitely, you can, get access to it as... If you have a landlord supply, It'll just be down to that relationship. The government have alluded to the fact that they might, put additional pressure on landlords if they're not passing through the savings to their their their tenant or the the the business in question. So, but they've not give us anything really concrete on that. Something we've actually wanted for a number of years, and I think what they're planning on doing is assessing what happens, you know, in this first round and then working with, I think it's Dan Bone, to see if they can do anything to basically put a bit of pressure on those landlords to share the share the savings out with the person who's actually eligible for it. Okay. Well, it's good that they can still claim, but, yeah, I think it's worth worth remembering. Keep that relationship good with the, with the landlords. Okay. And so if we move forward on the slides there, please, Sarah. I think we're... Are we are we... Maybe we're only out of time. Is this a 9AM finish? I think we think we may be. Yeah. Just a... One question that that I've I've been asked, for this, Dean, and it'd be good for you to get a explanation. I mentioned a couple of other energy incentives at the start of the call, CCL and and EII. Can VIX be claimed alongside those, or. how does that mechanism work? Yes. So, you know, the the main the main scheme... So as I said, the the other and most lucrative incentive is the EII exemption. If you have an EII exemption at the moment that only covers a portion of your your energy, and decks would be applicable to the other portion of your your energy consumption, then you can claim them both in tandem. So you can get the the additional relief of EII on what you have existing, and you can supplement and add on for the rest if if it's eligible for BECCS. What you couldn't do is you couldn't claim the two things at the same time for the same energy. And the reason for that is EII covers those three taxes that you get exempted from by VEX. So you can't exempt yourself from them twice. All of the other incentives you can definitely get. So there's a climate change levy exemption. You know, it's a separate thing, so you can claim that. And the other one would be the ETS EPS compensation scheme. Again, you know, there's not a lot of companies with that. You need to be in quite a specific sort of setup. But if you are able to claim ETS and you're doing that at the minute with lots of cash compensation, it doesn't actually reduce those taxes so you can claim it at the same time. No trouble. Okay. Brilliant. Like you said, I think we may be running out of time. Are there any questions at all, from anybody within the in the call? If nobody feels that they want to ask questions publicly, please feel free to maybe shoot myself or Dean or anybody a message afterwards. Yeah. There... There's not any questions at the moment, Dan, in the in the chat, but, yeah, if anyone's got any questions, they can get in touch with Tracy or I will move this slide on here. You can email that email address, and we'll get the questions passed on to, to Dan and Dean to answer. Perfect. Thank you very much, everybody. Thank you as well for hosting and really, really informative, session. Very valuable. Thank you very much. Thanks. Perfect. Thank you very. much, Tracy. Thank you. Thanks. Goodbye.